The present invention relates to an apparatus and concomitant method for improving the efficiency of sales account management. More particularly, this invention relates to an apparatus and method that analytically predicts the probability of closing a sale.
Managers of sales accounts are often challenged with the task of producing an accurate sales forecast. Unfortunately, due to the dynamics of the sales process, it is very difficult to accurately assess the probability of success of closing a sale (sales probability). Many objective and subjective factors affect the sales process, which is further complicated if the product involves complex and expensive equipment.
Some of these factors include the price of the product, the existence of competition, the advantages or disadvantages of a product when compared to its competition, the specific application of the product by the buyer, the ability to meet delivery schedule, the reputation of the product""s manufacturer in the field, the availability of technical support for the product, economic conditions and various custom requirements that are dictated by the buyer, e.g., buying criteria. Although some of these factors can be measured objectively such as the price of a product, the weight assigned to each factor for a particular product, buyer or application is often unknown. For example, price may govern the success of a sale for one buyer or product, while reliability may govern the success of a sale for another buyer or product.
Furthermore, since the sales process is heavily dependent on the relationship developed between a buyer and a sales person, sales forecast is inevitably based on the subjective assessment of success as reported by each individual sales person. Thus, an optimistic sales person may report an overly optimistic forecast while a conservative sales person may report an overly pessimistic forecast. As such, a large discrepancy often appears when a sales forecast is compared with actual sales. This problem is further amplified when sales forecasts are generated at the regional, divisional and company levels, where managers of these sales accounts may not be intimately involved in the actual sales process.
Therefore, a need exists in the art for an apparatus and method for generating accurate sales forecast without the associated large margin of error. Specifically, a need exists for a method for generating accurate sales probability by applying adjustment factors to minimize the subjectivity of sales forecast.
The present invention is a method and apparatus for generating accurate sales probabilities. The apparatus, a sales probability generator, comprises a general purpose computer having a central processing unit (CPU) and a memory for generating sales probabilities. More specifically, an operating system and sales probability engine are loaded from a storage medium into the memory and executed by the CPU.
The sales probability engine utilizes various sales information to determine the account control level corresponding to a particular stage of the sales cycle. The account control level is an objective measure of the sales person""s management of a sales account. More specifically, it is a measure of the sales person""s ability to gain access and address the buying criteria of key members of the buyer""s organization who control the buying decision.
A sales probability is then derived by applying the account control level and the current stage of the sales cycle as indices to a sales probability look-up table. In turn, the sales probability is multiplied with the total potential dollar value of the sales account to produce an objective measure, xe2x80x9cprobability dollarsxe2x80x9d. This measure or parameter is used to produce an accurate sales forecast which quantifies the likelihood of success for each sales account in terms of dollar values.
The present invention may also incorporate various optional methods of refining the sales probability by applying adjustment factors which account for skill level of the sales person (years of service, training, quota attainment and the like), the pattern of stage progression of the sales cycle, maturity of the data set (sales probability look-up table), relevant economic conditions, geographical conditions, maturity of the market region, relevant government trade policies, support capabilities or use of agency.